Current literature suggests that theory of mind (ToM) and recognition of facial emotion are impaired in behavioral variant frontotemporal dementia (bvFTD). In contrast, studies suggest that ToM is spared in Alzheimer disease (AD). However, there is controversy whether recognition of emotion in faces is impaired in AD. This study challenges the concepts that ToM is preserved in AD and that recognition of facial emotion is impaired in bvFTD. ToM, recognition of facial emotion, and identification of emotions associated with video vignettes were studied in bvFTD, AD, and normal controls. ToM was assessed using false-belief and visual perspective-taking tasks. Identification of facial emotion was tested using Ekman and Friesen's pictures of facial affect. After adjusting for relevant covariates, there were significant ToM deficits in bvFTD and AD compared with controls, whereas neither group was impaired in the identification of emotions associated with video vignettes. There was borderline impairment in recognizing angry faces in bvFTD. Patients with AD showed significant deficits on false belief and visual perspective taking, and bvFTD patients were impaired on second-order false belief. We report novel findings challenging the concepts that ToM is spared in AD and that recognition of facial emotion is impaired in bvFTD.